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Paytm Stock Soars to New Highs on Easing Headwinds
2 Dec
Summary
- Paytm shares hit highest level since December 2021.
- Goldman Sachs sees regulatory hurdles largely behind Paytm.
- Mutual funds increased their stake in Paytm significantly.
Shares of Paytm's parent company, One 97 Communications, have surged to their highest point since December 2021, marking a significant rally fueled by positive investor sentiment. This optimism stems from the gradual easing of past regulatory headwinds, which had previously impacted the company's performance. The Street is now more confident about Paytm's growth prospects and its ability to regain market share.
Goldman Sachs noted that Paytm has navigated several significant regulatory challenges, including bans on merchant onboarding and lending, as well as curbs on its payments bank. The firm believes these issues are now largely resolved, paving the way for recovery. They anticipate Paytm's UPI and overall payment market share to continue its upward trend following recent authorizations.
In addition to regulatory improvements, mutual funds have shown increased confidence by boosting their collective stake in Paytm. This accumulation of shares by institutional investors, alongside projected revenue growth and EBITDA estimates, underscores a favorable outlook for the company over the next few years. Goldman Sachs forecasts a 20-25% annual revenue growth for Paytm.
